Wednesday, July 15, 2009

Move to China; Cut Out the Middle Man

by Len Hart, The Existentialist Cowboy

If because your job has been out-sourced to China and you are reduced to shopping at Wal-Mart, you should consider a move to China to cut out the middle man! China is going to get your all but worthless dollars anyway by way of US retail outlet: Wal-Mart! And when the dollar is completely worthless, it 'won't matter anyhow'. We will all be living in Chinese made tents.

If because of GOP transfers of unearned wealth to the increasingly tiny elite of about one percent of the population, labor is unproductive or impoverished the productivity of the nation will decline and ultimately collapse.

If the poor can no longer afford decent housing or food it is because elites have bid up prices on commodities. But because conservative robber barons and huge corporations have consolidated control of markets, your threats of boycott are laughed at. If you can no longer afford decent housing, health care or food, you have most certainly fallen off the bottom rung. It is clear that big business doesn't care about your fate and because the GOP is owned, the GOP doesn't care either.

A Give a Shit Attitude!

Just this kind of arrogance preceded the crash of '29 and the Great Depression which followed. This is not, therefore, the first time in American history that 'big business' flouted its 'give a shit' attitude. In his great 'A Rendezvous with Destiny' speech to the Democratic National Convention of 1936, FDR' made it very clear what is wrong with America today. His great speech is just as true now as then. FDR called it what it was and remains: economic tyranny!

For too many of us the political equality we once had won was meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor, other people's lives. For too many of us life was no longer free; liberty no longer real; men could no longer follow the pursuit of happiness.

Against economic tyranny such as this, the American citizen could appeal only to the organized power of Government. The collapse of 1929 showed up the despotism for what it was. The election of 1932 was the people's mandate to end it. Under that mandate it is being ended.

The royalists of the economic order have conceded that political freedom was the business of the Government, but they have maintained that economic slavery was nobody's business. They granted that the Government could protect the citizen in his right to vote, but they denied that the Government could do anything to protect the citizen in his right to work and his right to live.

Today we stand committed to the proposition that freedom is no half-and-half affair. If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the market place.

There are but two recent root 'aggravations' of this economic tyranny:

The political ascendancy of the Bush family --Prescott Bush, George H.W. Bush, and, more recently, George W. Bush.

The rise of Ronald Reagan, his disastrous and inequitable tax cut of 1982, the two year long depression caused by 'Reaganomics', his legacy of increased terrorism against US interests, rising inequalities of wealth and income, the deterioration of educational standards seemingly everywhere in the US.

The origins of our dollar's collapse may be found in the Nixon and Bush trips to China as well as Reagan's 'give away' to his elite and greedy base. These extremist right wing policies have eaten away at our economic health like wood worms. The right wing/GOP subversion of our currency resulted in exceptions for the ruling elites while lower and working classes pay more than their fair share of taxes. It's why the real elites --just one percent of the total population--often pay no tax whatsoever!

Labor is taxed but capital gets a free ride --a recipe for an impending economic collapse, a collapse that appears to be well underway and beyond anyone's power or ability to stop. Nevertheless, the government will play it's well-rehearsed role, that of shakedown arm of the nation's tiny but increasingly wealthy elite.

Nixon deplaned in Beijing on February 21, his flair for both diplomacy and drama well in evidence. Notes Nixon biographer Stephen Ambrose, "He knew that when his old friend John Foster Dulles had refused to shake the hand of Chou En-lai in Geneva in 1954, Chou had felt insulted. He knew too that American television cameras would be at the Peking airport to film his arrival. A dozen times on the way to Peking, Nixon told Kissinger and Secretary of State William Rogers that they were to stay on the plane until he had descended the gangway and shaken Chou En-lai’s hand. As added insurance, a Secret Service agent blocked the aisle of Air Force One to make sure the president emerged alone."

Soon after their arrival, Nixon and Kissinger were summoned to a previously unannounced meeting with Chairman Mao, which Kissinger later referred to as their "encounter with history." Next came a formal welcome banquet hosted by Chou En-lai, broadcast live on the American morning news thanks to the 13-hour time difference. In the Great Hall of the People, as the People’s Liberation Army band played such American favorites as "America the Beautiful" and "Home on the Range," course after course was followed by seemingly endless rounds of toasts. "‘Seize the hour! Seize the day!’" Nixon quoted from Mao, raising his glass to his Chinese hosts. But beyond the pomp and spectacle, the banquets sent a clear and dramatic message to everyone watching that a new relationship was being forged.

Nixon's trip was preceded by a long buildup that included 'ping pong diplomacy' and a little known or written about advance trip by George Bush Sr.

Premier Chou En-lai worked the public relations opportunity beautifully, receiving the Americans at a banquet in the Great Hall of the People on April 14. "You have opened a new chapter in the relations of the American and Chinese people," he told the unlikely diplomats. "I am confident that this beginning again of our friendship will certainly meet with majority support of our two peoples." He also extended an invitation for more American journalists to visit China, provided they do not "all come at one time." That same day, the US announced plans to remove a 20-year embargo on trade with China. A Chinese table tennis team reciprocated by visiting the United States.

Ping-Pong was "an apt metaphor for the relations between Washington and Peking" noted a Time reporter, as each nation signaled, in turn, its openness to change. Despite the public warming trend, Nixon and Kissinger decided to keep their back-channel negotiations with China to themselves. It was not until July 15, after Kissinger's secret mission to Beijing, that Nixon announced that he, too, would make the journey the following year, as the first American president to visit China.

Bush's bailouts proved Marx correct but, like everything else GOP, they' mucked it up. It's not even 'good' Marxism. The bailouts have benefited only the nation's elites, the same gang that had benefited most from Reagan's tax cut of 1982. Marx said that Capitalism would collapse of its own inconsistencies, 'internal tensions which will lead to its destruction.' The GOP, the greater of two major sellouts to the MIC and K-Street, merely hastened that result. The 'elites' who benefit do not merely maintain offices on K-Street, they OWN K-Street! The Military/Industrial complex serves at their pleasure. The MIC is expected to defend 'their' interests (not yours) abroad with the lives of YOUR sons and daughters.

Some recent history may illustrate the point: the Wall Street crash of 1929 was followed by a severe world wide depression acutely felt in the US, Germany, France, and to a lesser degree --Great Britain and Sweden. Nevertheless, unemployment was high in Sweden when that nation returned a Labor government committed to a program of public investment to address the high unemployment problem. It worked. By 1935 real output in Sweden was 7 percent above its 1929 level. Unemployment was reduced and the finance minister was said to have been happy to suffer another budget deficit to stimulate the economy.

Ronald Reagan's budget deficit did not have as happy a result. So --why did Keynesian economics work for Sweden in 1929-30 but not for Ronald Reagan more recently? The answer is simple: Sweden was then --as it is now --among the world's most egalitarian economies. The US --among the very least egalitarian! Reagan's tax cut of 1982 benefited only the investor class at a time when increased consumer spending might have stimulated the economy. A 'Keynesian' deficit might have stimulated growth! The Reagan deficit had the opposite effect.

What's Wrong with the American Economy is Wealth and Income Inequities and the Dysfunctional Mentalities That Create Them

The proof of my assertion is the public record. Reagan's tax cut of 1982 was quickly followed by the nation's worst recession since the Great Depression, a recession of some 18 months characterized by record levels of unemployment and home losses. The economy contracted, people had less money to spend, many lost their homes and slept under bridges in 'boomtown' Houston. I know --I saw it. I was one of the lucky ones who somehow managed to keep a cozy home to sleep in. Luck! But for the grace of God go I! And no thanks to Unca Ronnie!

Reagan's best critics were found inside his regime, primarily, budget director David Stockman who blamed a "noisy faction of Republicans" for Reagan's infamous tax cut and the debacle that followed. Reagan might have achieved the prosperity that Keynes had predicted. That might have happened had his policies rewarded the working and middle classes instead of the rich and idle elites. Fact is --Ronnie was owned! The government is owned! The MIC is owned! We are owned! We are slaves to a system that may be beyond out ability to reform short of revolution.

The Reagan-heads forgot that the wealth of a nation is the result of the 'work' that is done by its people --not the 'offshore investments' of an utterly worthless, idle leisure class.

The US economy has entered into a contraction not seen since 1929. Private and public payrolls combined have shrunk for 14 straight months. Just recently, the US economy lost some 650,000 jobs over a period of four months. At the time, I asked: why had not GWB's bailouts worked? Obviously, as was the case with Reagan's 'voodoo economics', the wrong people got the money. Most certainly, the wrong people continue to get the money. The wrong 'people' were bailed out. The wrong people still get rich. You still get poorer whether you still have a job or not.

There was no Reagan recovery!

The record shows that the growth rate was 3% between 1979 and 1989 --the same as the growth rate between 1973 and 1979! There was, then, no improvement with "voodoo economics" than without it. Did Reagan's tax cuts bring about more growth than would have normally occurred? Of course not! The opposite occurred. The GOP/right wing is happy when you swallow whatever they puke up.

Worth repeating:

The opposite occurred. The record shows that the growth rate was 3% between 1979 and 1989 --the same as the growth rate between 1973 and 1979! There was, then, no improvement with "voodoo economics" than without it.

There was no Reagan recovery. Punch out the next gopper who tries to tell you that there was. Wealth did not trickle down! Rather, wealth has continued to be transferred upward to about one percent of the total population. Recently, the bailouts just wound up in the wrong hands and may have made matters worse! As Santayana said: "Those who do not remember the past are condemned to relive it!"

I am inclined to believe that this transfer was deliberate, planned and executed. It abated only briefly in Clinton's second term. That is but one reason Clinton is officially and systematically demonized and reviled. I have my own problems with Clinton, that is, he did not go far enough. But everything said about Clinton by Republicans are lies! Likewise, I have problems with Obama --but everything said about him by Republicans can be dismissed summarily.

The rise of Ronald Reagan brought with it a spreading of wealth upward to the upper classes and Wall Street insiders, in fact, an increasingly tiny elite of just one percent of the nation which owns more than 90 percent of the nation's total wealth. That fact is graphically illustrated above. The result is factually documented by the government's own agencies --Census Bureau, Bureau of Labor Statistics, Department of Commerce-BEA, et al. Income inequality is measured by what economists call the GINI index. The higher the GINI, the greater the inequality. These numbers, recognized and cited by economists from Friedman to Krugman, from Keynes to Galbraith, invariably increase during GOP regimes.

Now --as the late Steve Kangas pointed out, 'conservatives' will claim that correlation is not 'causation'. I think conservatives are wrong on that point, but if, in fact, GINIS always go up under GOP regimes, what difference does it make? The pragmatic solution is simply this: fire the GOP! Permanently! We cannot afford to continue to support both the GOP and its elite, pampered, privileged sponsors in business, industry and government. See more about 'income inequalities' at: What do liberals believe about income inequality? Also: Myth: The rich get rich because of merit. The rich get rich because they are born rich and get obscene tax cuts for producing nothing.

There are many parallels with the American economy of the 1920s. The economy was booming but by 1927 the nation had overproduced goods for which there was no market. Overproduction led to a slowdown in both manufacturing and agriculture. This is evidence --if not proof --that 'trickle down/supply side' economics is a deliberate right wing fraud. Transferring monies to manufacturers that are over-produced is economic disaster. Why should a capitalist get a tax cut for producing product that cannot and will not be sold? Wealth does not 'trickle down', rather, it is transferred to tax heavens offshore. Clearly --a bailout for big banks is a mistake that will continue to have the effect of reducing the supply of money in circulation --a 'contraction'. The so-called 'Great Depression' was, in fact, agreat contraction in which those who would have spent monies were deprived of it.

During the Great Depression and, later, Ronald Reagan's depression of about two years, millions lost their jobs. Earlier, in 1929, bankers and financiers continued to speculate on stocks, borrowing the money and buying stocks 'on margin'. More recently, 'short sellers' made fortunes that you can rest assured have already been transferred into offshore tax havens.

The wealth of a nation is not the money it prints, borrows or coins. The wealth of a nation is the productivity of its people and their industries. Both declined under Reagan and declined again under Bush and declined yet again under the other Bush!

One wonders why Reagan didn't just cut out the middle man. A more equitable tax cut or better a more progressive tax might have put more spendable income directly into the hands of consumers. Spent money circulates and drives an economy. That consumers spend money seems to be a fact lost on the likes of Reagan, Bush, and the nation's rich and callous elites.

Surely, there were knowledgeable advisers in Reagan's regime who knew better. The tax cut, therefore, was entirely political, a pay off to the rich for their support, or more precisely, their investment! Nothing has changed in the GOP. The Bush administration has made several such "payoffs" during his catastrophic and criminal regime.

The 'contraction' of an economy is typically called a 'depression'. The US economy is contracting due to

the transfer of wealth to but about one percent of the population;

this 'elite' has transferred most of its wealth offshore where it has absolutely no good effect on the domestic US economy.

The current collapse of the US is the end result of a trend that was begun with the passage of Ronald Reagan's infamous tax cut for his rich, elite base. The year was 1982. Historians willl write of that date that it was the beginning of the end of the American empire.